Employment issues in M&A transactions in Switzerland

• In general: no consequences for employment conditions, and no notifications necessary as there is no change of employer.
• whether any special arrangements or employment terms exist between the involved companies and its employees relating to a ‘change of ownership’. Provisions may be contained in individual employment agreements (e.g. golden parachutes), collective bargaining agreements, or in internal regulations/ rules of the company.

• Not applicable, unless any special arrangements or employment terms exist.

• Not applicable, unless any special arrangements or employment terms exist.

• Not applicable, unless any special arrangements or employment terms exist.

• Not applicable, unless any special arrangements or employment terms exist.

• In general: no consequences for employment conditions, and no notifications necessary as there is no change of employer.
• whether any special arrangements or employment terms exist between the involved companies and its employees relating to a ‘change of ownership’. Provisions may be contained in individual employment agreements (e.g. golden parachutes), collective bargaining agreements, or in internal regulations/ rules of the company.

• Not applicable, unless any special arrangements or employment terms exist.

• Not applicable, unless any special arrangements or employment terms exist.

• Not applicable, unless any special arrangements or employment terms exist.

• Not applicable, unless any special arrangements or employment terms exist.

• a works council (employees’ representative body) exists;
• any measures affecting employees (such as dismissal, reduction of salaries, relocation, change of job description, or other measures with a substantial negative impact on the terms of employment) are planned as a result of the transfer. If this is the case, then the works council, or where such a body does not exist, the employees themselves, must not only be informed, but also consulted in good time prior to a decision over such measures being taken;
• a merger of pension funds will take place. If accession agreements exist, clarify which of these are to continue, and which are to be dissolved (notice period);
• any special arrangements or employment terms exist between the involved companies and its employees relating to such transaction. Provisions may be contained in individual employment agreements (e.g. golden parachutes), collective bargaining agreements, or in internal regulations / rules of the company.

• the wording of information for the attention of the works council or, if no such body exists, the employees themselves regarding the reasons for the transfer and the legal, economic and social consequences of the transfer for employees. The information must be given in good time prior to the transfer; the wording of consultation for the attention of the works council or, if no such body exists, the employees themselves regarding the respective consequences if any measures affecting employees (such as dismissal, reduction of salaries, relocation, changes of job description, or other measures with a substantial negative impact on the terms of the employment) are planned as a result of the transfer. Consultation must be in good time prior to a decision on such measures being taken (guideline: approx. two weeks);
• dissolution of the pension fund if a merger of the pension funds is to take place.

• The works council or, if no such body exists, employees themselves regarding the reasons for the transfer and the legal, economic and social consequences of the transfer for employees. The law stipulates that employees must be informed in good time prior to the transfer. If the duty is merely to inform, such information need not be given before the decision over the transfer is taken.
• The pension fund, if a merger of the pension funds is to take place.

• The works council or, if no such body exists, the employees themselves regarding the respective consequences if any measures affecting employees (such as dismissal, reduction of salaries, relocation, changes of job description, or other measures with a substantial negative impact on the terms of employment) are being planned as a result of the transfer.
• Consultation regarding measures affecting employees must be in good time prior to a decision on such measures being taken (guideline: approx. two weeks).
• The works council/employees may propose changes to the measures planned. The employer is only under an obligation to duly consider the proposed changes.

• the transaction and (if applicable) the merger of the pension funds.
• Under Swiss law, if an enterprise (or part thereof) is transferred to a third party, the employment relationships are transferred to the acquiring party, including all rights and obligations as of the date of transfer, unless the employee declines the transfer.
  However, if an enterprise or part thereof is transferred in the course of a composition moratorium or bankruptcy proceedings, or under a composition agreement with assignment of assets, the employment relationships are transferred to the acquirer only if this has been agreed with the purchaser and the employee does not object to the transfer.
• The seller and purchaser are jointly and severally liable for any claims by the employees of the seller which: (I) became due prior to the transfer; or (II) become due between the date of the transfer and the date on which the employment relationship could normally be terminated or is terminated (if the employee declines the transfer).
• If the employers do not comply with the above-mentioned information/consultation provisions, a works council body can file a request with the court to prohibit entry of the asset transfer in the Commercial Registry (Art. 77 of the Swiss Merger Act).

• the seller is complying with the information and/or consultation obligations mentioned above. According to the law, the information or consultation must be performed by the employer transferring the enterprise.
  If the employer does not comply with the above-mentioned information/consultation provisions, a works council can file a request with the court to prohibit entry of the asset transfer in the Commercial Registry (Art. 77 of the Swiss Merger Act);
• a merger of the pension funds is to take place. If accession agreements exist, clarify which of these are to continue, and which are to be dissolved (notice period);
• any special arrangements or employment terms exist between the involved companies and its employees relating to such transaction. Provisions may be contained in individual employment agreements (e.g. golden parachutes), collective bargaining agreements, or in internal regulations / rules of the company.

• the dissolution of the pension fund, if a merger of pension funds is to take place.

• the pension fund, if a merger of the pension funds is to take place.

Not applicable.

• the transaction and (if applicable) the merger of pensions funds.
• Under Swiss law, in the event that an enterprise (or part thereof) is transferred to a third party, the employment relationships are transferred to the acquiring party, including all rights and obligations as of the date of transfer, unless the employee declines the transfer. However, if an enterprise or part thereof is transferred in the course of a composition moratorium or bankruptcy proceedings, or under a composition agreement with assignment of assets, the employment relationships are transferred to the acquirer only if this has been agreed with the purchaser and the employee does not object to the transfer.
• The seller and purchaser are jointly and severally liable for any claims by employees of the seller which: (I) became due prior to the transfer; or (II) become due between the date of the transfer and the date on which the employment relationship could normally be terminated or is terminated (if the employee declines the transfer).
• If the employers do not comply with the above-mentioned information/consultation provisions, a works council body can file a request with the court to prohibit entry of the asset transfer in the Commercial Registry (Art. 77 of the Swiss Merger Act).

The rules mentioned in Section B. ‘Asset Deal’ also apply in the case of a merger.